When the consumption of a good generates an external benefit:
a. the private benefit consumers receive from the good will be higher than the true social benefit.
b. too much of the good will tend to be produced from the viewpoint of economic efficiency.
c. the community generally suffers an exactly offsetting external cost from the production of the good.
d. the market demand curve will understate the total benefits derived from consumption of the good, and as a result, too little of it will be produced and consumed.
d
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Suppose Island Bikes, a profit-maximizing firm, is the only bike rental company in a small resort town. The marginal cost to Island Bikes of renting out a bike is $3, and Island Bikes has no fixed costs. Each day Island Bikes has six potential customers, whose reservations prices are listed below.CustomerReservation Price($/Rental)A22B16C12D8E6F4 Suppose Island Bikes knows that customers whose reservation prices are at least $10 always rent bikes before noon, while those whose reservation prices are below $10 never do so. If Island bikes can charge a different price in the morning and in the afternoon, then in the afternoon, it will rent out ________ bike(s) and charge ________ per bike.
A. 5; $10 B. 1; $8 C. 3; $4 D. 2; $6
Refer to the above table. Which variables in the table are NOT autonomous?
A) planned consumption and planned saving B) planned saving only C) taxes, government spending, and saving D) planned investment, net exports, and government spending
"Extractive industries" include the production of all of the following products except:
a. fur. b. lumber. c. naval stores. d. bread.
According to research by William Shepherd, competition has increased in U.S. industries since World War II due to
a. both c and d b. all of the following c. international trade d. deregulation e. antitrust activity